IBM Click-To-Buy Consulting: Gimmick Or Growth Engine?

As more tech spending moves outside IT, IBM needs new ways to get in on the action.

Do people want to buy consulting services online, like they order a pizza? IBM is trying out a click-to-buy web approach for five of its consulting services. It sounds a tad gimmicky, perhaps, but the reasons behind IBM's idea are real, and they say something about who's driving a lot of technology spending (not the CIO) and what these new buyers expect from consultants and the technology they bring.

Here's what IBM is up to. The company's website now offers five narrowly defined services in the US and UK, using menu-based pricing, that companies can order online. IBM promises to respond in 24 hours, and the consultant will confirm the order and the expected outcomes. Payment options include using a credit card.

The five services focus on digital services such creating a dashboard and report that will tell an executive how a brand or a product, or a competitor's product, is perceived in social media. IBM is targeting projects that are "consumable in small pieces, it's not a large engagement," says Sarah Diamond, general manager of IBM Global Business Services.

IBM intends to quickly add more services through this online, menu-pricing approach, along with extensions to non-English-speaking markets, if the services sell well. "We're moving fast because we see the market moving fast," notes Diamond, who says we're undergoing a "fundamental shift in the consulting industry."

The other four services are analysis of your development environment with recommendations for improvements; migration of mobile apps to IBM's Worklight mobile platform; and two services aimed at the assessment of SAP and Oracle implementations to look for areas to wring out more value.

Here are some of the forces to which IBM is reacting with this click-to-buy approach.

More tech spending is outside the CIO's control Diamond points to a Forrester study that forecasts that the share of IT projects primarily or exclusively run by the IT department will fall from 55% in 2009 to 47% by next year. "We're definitely seeing that," she says.

IBM doesn't have the same long-running relationships with the likes of chief marketing officers and chief digital officers that it does with CIOs and IT departments. And those execs often don't want the kind of long-term engagements that IT has taken on, such as application management services. IBM needs ways to grab these potential new buyers who don't have IBM ties, who probably are relying on the web for their initial vendor research, and who are used to buying no-hassle, pay-as-you-go software-as-a-service.

IBM's website isn't quite as transparent about pricing as, say, a Salesforce.com SaaS service, which lists pricing publicly on its site to see and compare; would-be IBM buyers need an "IBM ID" to see prices and to order. But I was able to set up an ID in only a few minutes and see pricing. The site shows a social media dashboard and report of one brand or product runs $10,000, for example.

So does IBM risk alienating the CIO with this approach, becoming yet another tech vendor trying to route around the IT department? "The CIOs already realize that their peer group in the C-suite are out there looking at choices and solutions that meet their needs," Diamond says, adding "we're well past the point" where companies expect all tech spending to route through IT.

Execs want results faster This new breed of non-IT, tech-buying executive is impatient to see outcomes from their spending. So are traditional IT buyers for that matter. Our own research shows CIOs' No. 1 concern is they can't deliver fast enough to meet business needs. The social media analysis, for example, promises "actionable insights" in two to four weeks.

"We're talking a matter of a few weeks, not months," says Diamond, on the timelines for these new services. "That's very much in sync with how we're seeing our customers want to buy."

Diamond says IBM teams will use more tools such as online assessments that can "accelerate the front end" of research and get results faster. The social media analysis has an 8-page short-answer form for buying companies to fill out, for example.

Digital business opens new markets Digital business strategies -- from social media marketing to mobile app engagement with customers -- create a new and wide-open market for consultants, and there are execs driving digital business efforts who just wouldn't consider IBM for their needs. They might be wary of the cost and time that comes with a squadron of consultants showing up onsite for a project, and may think that's the only way IBM works. There also are smaller companies that haven't thought IBM would tailor something to their needs, Diamond acknowledges.

"It's very important to expand our traditional market," she tells us.

IBM describes the services it's offering via this model in detail at its US and UK websites.

Need to pump up your team's digital business savvy? Attend the InformationWeek Leadership Summit Sept. 30 as part of Interop New York. Join me and digital business practitioners and consultants as we discuss real-world projects and problems in this interactive all-day workshop.

Chris Murphy is editor of InformationWeek and co-chair of the InformationWeek Conference. He has been covering technology leadership and CIO strategy issues for InformationWeek since 1999. Before that, he was editor of the Budapest Business Journal, a business newspaper in ... View Full Bio

What would the CEO say if he heard that the VP of Marketing hired Deloitte for financial consulting without involving the CFO?

Here's the question - does lack of control over the entire IT budget threaten the CIO's ability to perform? Or can they find a way to adapt and build relationships/advice to others in the organization who buy IT?

"That's a good point Gigi3, I would think a big reason for this is to find the person who's web searching for options for social media analysis. That's why I dug around to see if I could get pricing on this site. IBM could make it easier by not requiring registration, but it's a start. I asked directly whether this is aimed at people using search to find services, and Diamond said that's part of it. "

Chris, thanks for the justification. There is no doubt that later they will plan it in a better way.

"I agree with Gigi3. And will add, it's never too late for IBM to be a fast follower."

Jastroff, thanks. For any business success depends up on the end user or customer satisfaction. Satisfaction depends up on many factors like low cost, better technology, easiness in using technology, how it's addressing the issues/problem and finally support. In normal business all this factors depends on vendors and third party service providers; where the real essence is get diluting while passing the service through these hands.

That's a good point Gigi3, I would think a big reason for this is to find the person who's web searching for options for social media analysis. That's why I dug around to see if I could get pricing on this site. IBM could make it easier by not requiring registration, but it's a start. I asked directly whether this is aimed at people using search to find services, and Diamond said that's part of it.

"IBM is trying out a click-to-buy web approach for five of its consulting services. It sounds a tad gimmicky, perhaps, but the reasons behind IBM's idea are real, and they say something about who's driving a lot of technology spending (not the CIO) and what these new buyers expect from consultants and the technology they bring."

Chris, it can provide better reachability and can avoid the hassle of approaching the end customers with different level of filtrations. E-commerce is a part of their business and they are offering such services in a user friendly way to the customers through certain clicks.

This sounds like a sales lead machine to get a foot in the door. I'm sure this casual, quick-hit consulting sessions will involve more than a little fact gathering -- through much of that could be done with D&B, Hoovers and what not when somebody raises their hand for a bit of consulting. Once inside the trap door opens and the Trojan consulting calls come next... or so I'm thinking.

I didn't ask, and someone from IBM can chime in if they're so inclined. But I'd be surprised if there was much emphasis on that. IBM's push here seems to be about a specific outcome in a short period, not about X resources for Y time.

To learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.

Chances are your organization is adopting cloud computing in one way or another -- or in multiple ways. Understanding the skills you need and how cloud affects IT operations and networking will help you adapt.